Agent groups speak out against congresswoman’s call to limit MA compensation

The Medicare agent community is speaking out against a bill by Rep. Alexandria Ocasio-Cortez, D-N.Y., that would limit broker compensation for Medicare Advantage Plans.

Ocasio-Cortez’s bill would cap compensation for agents and brokers representing for-profit Medicare Advantage organizations. The bill seeks to redefine what constitutes compensation, targeting financial incentives that she said may skew agents' advice toward specific plans.

The proposed bill would require the Secretary of the Department of Health and Human Services to establish a maximum compensation amount for an agent, broker or other third party representing for-profit insurers offering Medicare Advantage plans. The legislation also redefines what that compensation entails so that for-profit insurers cannot provide agents and brokers with financial perks like bonuses and vacations in exchange for signing individuals up for specific Medicare Advantage plans.

During a hearing of the House Health Subcommittee of the Committee on Energy and Commerce, Ocasio-Cortez noted that those who turn 65 are “often inundated with all sorts of information about the different Medicare Advantage plans available to them.

“I mean, you turn on daytime television, and you've got all these celebrities; you've got Joe Namath and William Shatner talking to you about Medicare Advantage plans. You get lots of mail. People start getting tons of marketing about these plans.

“And because of the amount of money that these for-profit insurers invest in marketing, people don’t understand that Medicare Advantage is not Medicare; it is corporate, for-profit managed insurance.”

Ocascio-Cortez contended that the compensation offered by insurers could cloud agents’ and brokers’ decision-making in recommending certain plans.

Agent: Compensation is not the issue in affordability

Agents and brokers – and the organizations that represent them – are pushing back, saying that agent compensation is not the issue in Medicare affordability and misleading marketing.

“If Congress wants to address bad incentives, misleading marketing or beneficiary confusion, I’m all for that conversation. Those are real issues,” said Amanda Brewton, Medicare strategy and compliance expert, and founder of Medicare Answers Now.

In a social media post, Brewton said, “If the solution is reducing compensation for independent agents, who exactly do we think disappears first? Not the billion-dollar insurance companies. Not the celebrity endorsements. Not the national call centers. Not the massive marketing budgets.

“The people who disappear are the local agents sitting across the kitchen table from a senior trying to figure out the difference between Medicare Advantage, Medicare Supplement, Part D, provider networks, prior authorizations, and prescription coverage.

“The same agents answering the phone when a medication isn’t covered. The same agents helping beneficiaries fix enrollment mistakes. The same agents explaining options long after the enrollment is over.”

Brewton said that last year, 120,000 licensed agents helped more than 9 million Medicare beneficiaries enroll in coverage and answer concerns.

“Not the carrier. Not the internet, but a local agent,” she said.

“Could compensation structures be improved? Absolutely. Should bad actors be held accountable? Without question. But if policymakers are serious about protecting beneficiaries, they need to hear from the people who work with those beneficiaries every single day.”

NABIP: Remarks on bonuses ‘don’t reflect today’s reality’

The National Association of Benefits and Insurance Professionals said it supports initiatives to improve transparency in healthcare but added that “comments suggesting Medicare agents are routinely motivated by lavish bonuses or luxury trips do not reflect today's reality.”

In a statement posted on social media, NABIP said that since 2009, the Centers for Medicare and Medicaid Services has tightly regulated Medicare Advantage and Part D agent compensation.

“Meanwhile, agents continue serving as trusted advisors who help beneficiaries compare coverage options, understand provider networks, evaluate prescription drug costs, and resolve issues long after enrollment,” NABIP continued.

“If policymakers want to address challenges in the Medicare marketplace, there are real issues that deserve attention: beneficiary confusion, unregulated lead generation and market instability caused by major carrier decisions.”

HAFA: Agents and brokers ‘are not the problem’

Medicare agents and brokers “are the professionals sitting at kitchen tables, answering frantic phone calls, helping seniors understand their Medicare options, guiding beneficiaries through complex coverage decisions, and protecting consumers from fraud, confusion, and costly mistakes,” Ronnell Nolan, president and CEO of Health Agents for America, said in a statement.

“Based on her comments, it appears Congresswoman Ocasio-Cortez has received inaccurate or incomplete information regarding the role of licensed agents and brokers, including references to so-called ‘kickbacks’ and industry trips. Licensed Medicare agents are highly regulated professionals who operate under extensive federal and state laws, CMS regulations, compliance requirements, compensation rules, and oversight. Characterizing an entire profession based on misconceptions does a disservice to both agents and the millions of Medicare beneficiaries who rely on us every day.”

Agents and brokers are among the strongest advocates for consumer protection, Nolan said, adding that HAFA has spent years working with regulators, lawmakers, carriers and government agencies to identify fraud, increase transparency, and improve accountability throughout the Medicare marketplace.

“We believe that meaningful policy discussions should be based on facts, not misconceptions,” Nolan said. “We stand ready to have that conversation at any time.”

NAIFA ‘does not defend bad actors’

The suggestion that agents and brokers are motivated by commissions instead of their clients’ best interests “is both unwarranted and inaccurate,” Kevin Mayeux, CEO of the National Association of Insurance and Financial Advisors, said in a statement.

Mayeux noted that compensation limits are set annually by CMS and the compensation structure for Medicare Advantage enrollments “is not hidden or unregulated.

“It is established, capped, and disclosed under federal rules.”

NAIFA “does not defend bad actors,” Mayeux continued. “Where misconduct exists, it should be investigated and punished under the robust enforcement tools regulators have at their disposal. However, isolated misconduct by a small number of entities is not a basis for legislation or rhetoric that mischaracterizes the countless agents and brokers who serve their communities with professionalism and integrity.”

NAIFA urged the committee members to engage directly with the agent and broker community as it considers legislation affecting Medicare Advantage marketing and compensation.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].